“Payment processing” refers to the services and processes that automate transactions of payments between a merchant and a shopper. It is mostly a third party service system that computer processes, verifies and declines or accepts payment through a credit card on behalf of the business owner via a secure Internet connection. As the ability to accept payments online increases the range and scope of any business and as online payments’ acceptance are mandatory for online business, payment processors are of high importance. Their services allow your customers to buy from your site 24/7 without any external assistance. If you have a real store then you can install a POS device and start accepting debit card and credit card payments with the help of a reliable payment processor. If you have a website then you can accept digital payments directly from your website.
What are the different roles of payment processors?
Payment processors are quite different from an ecommerce payment gateway and they are probably slightly more important as well, although they work hand-in-hand to sort everything out. If you want to accept credit cards as a business then you will need a merchant account set up. Now, the payment processor is the institution that executes the deal by sharing data between your businesses, the issuing bank and the merchant. A payment processor will provide you the POS devices or any equipment and credit card machines required to accept payment by credit card.
Payment processing can require payment gateway integration with your website but if you are not engaged in ecommerce, and you only need to accept cards in person at your physical store location, then you don’t really need payment gateway integration. When you are selecting a payment processor make sure it provides you a merchant account and easy payment gateway integration.